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Columbia Law School

Insurance Law

Risk aversion

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Full-Text Articles in Law

Deals, Victor P. Goldberg Jan 2020

Deals, Victor P. Goldberg

Faculty Scholarship

Over a quarter of a century ago, Ron Gilson, Dan Raff, and I developed a new course, The Economics of Complex Transactions, which came to be known as Deals. The motivation for the course was our perception of a great imbalance in the law school curriculum, which was weighted heavily toward litigation, particularly appellate litigation. While a substantial number of our graduates were becoming transactional lawyers, there was hardly anything available to prepare them for that practice. Our concept was that lawyers were transaction engineers and, when designing contracts, they faced a generic set of problems. Furthermore, there were techniques …


The Devil Made Me Do It: The Corporate Purchase Of Insurance, Victor P. Goldberg Jan 2009

The Devil Made Me Do It: The Corporate Purchase Of Insurance, Victor P. Goldberg

Faculty Scholarship

Despite the fact that public corporations ought to be risk neutral, they often carry insurance. This note first considers why insurance (or more precisely, the package of services provided by insurance companies) might create value, regardless of the risk preferences of managers, shareholders, or other corporate stakeholders. One motive is that their contractual counterparties – buyers, lessors, and lenders – require that they carry insurance. Three explanations for why the requirement might be value enhancing are proposed.